Protecting Your Company from Accounting Fraud
Accounting fraud keeps evolving to complex levels as your business organization evolves and grows. Fraud threats are gettingmore complex and varied increasing the chances of it occurring within your organization. KGRN Accounting Associates, Dubai, has witnessed the challenging situations business firms face within the UAE. It has givenus an insight into the how fraudulent accounting activities come into being and how businesses such as your own can protect themselves.
Increase in Accounting Fraud
Before you take steps to protect your organization from occupational fraud you need to understand how exactly it comes into being and how it is changing. A PricewaterhouseCoopers study says at least 37% companies all over the world have experienced the effects of fraud in the last two years. The number was 21% in the Middle East. Organizations experiencing fraud are also experiencing an increase in the number of fraudulent activities. That means it is essential for every business firm to protect themselves effectively and immediately to avoid becoming the next target.
Asset misappropriation fraud and procurement fraud, where the offender obtains an advantage and avoids meeting obligations or begins to damage the organization, are common occupational frauds. Procurement fraud usually takes place during vendor selection and vendor contracting.
Who is Committing Accounting Fraud Today?
There has been an interesting development with regards to the persons who actually commit the most fraud. The statistics show that fraud committed by internal parties is much higher in comparison to fraud by external parties. Also, the main culprits in internal fraud fall within the middle management category. While fraudulent activities among junior employees is much less.
Cybercrime is a Growing Issue
It does not come as a surprise that cybersecurity needs to beef up for all kinds of businesses. Internal accounting fraud can be easily conducted through cybercrime. And, as we continue to progress and get more of our private business information on cyberspace the threat of cybercrime it continue to increase and so will fraud in businesses.
Protecting Your Company from the Increasing threat of Accounting Fraud
It has become easier to detect acts of fraud with the help of better internal control and an increased risk assessment activates. But the main cause and increased progress of fraud inside business establishments is the extremely relaxed approach everyone has towards the prevention of fraud.
The Importance of Assessment
Assessments are vital to know if there are changes of any kind big or small that could result in accounting fraud. Performing assessments once in a way is not enough. The more the frequent the better. Also make sure you do random checks so the fraudster can be caught in the act and employees with the intention of committing fraud will back off. If the frequency of assessments reduces during slow periods, you are leaving yourself wide open for fraud criminals to attack you.
The risk of fraud will always exist in business. It is up to you to develop and implement internal controls that enable you protect your business. To improve your control over your accounting, you can ask reliable and trustworthy accountants for their advice and assistance.
It is essential for you to stay aware and constantly try to improve your protection plan. KGRN can help you out with this through our tried and tested accounting solutions and business growth strategies.